Networks are being turned inside out by online players like Netflix

The most talked about show on American television this year isn’t on television. House of Cards, a $100-million political thriller (based on the British show of the same name) does not appear in any network’s schedule, has never been broadcast, yet has been seen by millions of people — streamed over the Internet to Netflix’s 30 million U.S. subscribers, at any time and in any configuration (one, some, or all 13 episodes at once) that suits them.

Netflix is hardly alone in this space. Hulu, Amazon, AOL, Crackle, plus dozens of smaller startups are all busily ramping up the range and quality of online content they provide, hoping to emulate Netflix’s success. There is, indeed, something of a gold rush on for content online. Yahoo has just bought Saturday Night Live’s entire back catalogue. YouTube now offers full-length feature films alongside its traditional repertoire of skateboarding dogs.

Content providers are also proliferating, and drawing a growing audience. A popular channel on YouTube, produced by anyone from a Hollywood studio to the proverbial kid in the basement, might have upwards of five million subscribers — more than most top-rated cable shows — while a given video can draw many multiples of that in views.

No surprise, then, to see the circle of interest in video production and distribution widen to include, for example, Twitter, which has been cutting deals with various content providers to include video clips in its feeds, and to make new programs out of them in its turn — and which has just hired away, in a stunning sign of the times, the head of CBC’s English language division, Kirstine Stewart.

But it isn’t only the networks who are scrambling to adjust to this new world. As more and more content comes online, more and more viewers are “cutting the cord,” that is cancelling their cable or satellite TV subscription. Sensing opportunity, Intel, the computer chip maker, will later this year introduce its own set-top box, with which to deliver online programming directly to conventional television sets.

But it’s debatable whether we will long speak of such things as TVs, separate and distinct from computers. Already manufacturers are selling hybrid machines; somewhere over the horizon lurks whatever it is that Apple has in the works. And if you don’t think that has revolutionary implications for the industry, consider that we have just marked the 10th anniversary of iTunes.

Networks, carriers, the TV sets themselves: it’s all going in the blender. The world we knew, of a numbered array of channels, each offering a chronological sequence of programs on a fixed schedule, has but a few years to live — maybe months. Most likely it will be replaced by a screen full of icons, a la Netflix or YouTube, representing your favourite programs. But who can say? The point I want to leave you with is how thoroughly the industry is about to be — is being — turned inside out.

Because now I want to take you to a committee room in Gatineau, Que., where the CRTC is holding hearings — in 2013, not 1968 — on whether to require cable companies to carry, and their subscribers to pay for, a raft of new and existing channels that have been unable to persuade subscribers to part with their money on their own. That is, the applicants are asking to be added to the bundle of channels known as “basic cable,” which every cable subscriber in the country is obliged to take. Never mind channels — bundles! It’s almost charming, it’s so anachronistic.

Do any of the people in that room have the faintest idea what time it is? The regulatory model on which all this is based was already obsolete with the advent of cable and pay television — with hundreds of channels, and as important the ability to charge viewers directly for each, it was no longer necessary to use the state to ensure viewers had a diversity of choices, or to force them to pay for them. That the model has survived as long as it has is mostly due to inertia, not to say regulatory capture: bundling, in particular, should have gone long ago.

But to be arguing to expand it now, in the midst of this maelstrom — hubris isn’t even the word. I’ve written before of the infinite humbug of Sun News Network, demanding what is in effect a tax on cable subscribers even as it rails against the tax-funded CBC. (Not hypocrisy: fairness, Sun’s defenders respond. But the issue isn’t whether Sun is being treated unfairly. Suppose it is: why should consumers have to pay a tax to make things fair? Even if the CBC remains publicly funded — which it shouldn’t — when did Sun become a public good?)

As for the application from Starlight: The Canadian Movie Channel — the policy rationale for forcing Canadians to pay for movies they do not wish to watch remains as hazy as ever, however many nationalist cliches may be hauled out in its defence. Leave aside the manifold virtues of “telling ourselves our own stories.” How do we tell ourselves these stories if we’re not listening? You may be able to force consumers to pay. You can’t force them to watch.

But in fact you can’t even force them to pay: not for much longer. Outside of that stifling committee room, it’s not going to be possible to force anybody to pay for anything. That world, and all of the people in it — the networks, the cable companies, the commissioners themselves — are about to be washed away, and not a moment too soon.

A National Post original, Andrew Coyne's journalism career has also included positions with Maclean's, the Globe and Mail and the Southam newspaper chain. In addition, he has contributed to a wide range... read more of other publications including The New York Times, The Wall Street Journal, National Review, Time and Saturday Night. Coyne is also a long-time member of the CBC’s popular At Issue panel on The National.View author's profile